Ahead of the upcoming Union Budget, representatives from various farmer associations and agricultural experts met with Union Finance Minister Nirmala Sitharaman on Friday in New Delhi. The primary agenda was the removal of export restrictions on several agricultural commodities, a demand strongly advocated by the farming community. The two-hour meeting saw the presence of Union Minister of State for Finance Pankaj Chaudhary, the Finance Secretary, and senior officials from the Ministry of Agriculture. MJ Khan, Chairman of the Indian Chambers of Food and Agriculture, highlighted the urgent need to lift these bans during the discussions.
India’s Agricultural Export Challenges and Solutions
“Our agri-export share is only 2 percent of global agri exports. Due to the ban on some agricultural products, our exports have declined,” said MJ Khan. “India faces a USD 4 billion cut in agricultural exports due to trade restrictions on staples like wheat, rice, and sugar. We need to avoid knee-jerk reactions and focus on creating export hubs.”
Agricultural economist and distinguished professor at ICRIER, Ashok Gulati, emphasized the surplus in rice stocks held by the Food Corporation of India (FCI) and suggested prioritizing the opening up of rice exports. He also stressed the immediate need to lift the ban on onion exports.
Badri Narain Chaudhary, President of the Bhartiya Kisan Sangh, called for a long-term agricultural policy and improved data collection in the agriculture sector. “We don’t have any agriculture policy. The government should start collecting data on the agriculture sector,” he said.
According to the Agricultural and Processed Food Products Export Development Authority (APEDA), there has been a significant 9 percent decline in exports under its purview. The export bans undertaken by the Government of India aim to balance consumer affordability and support the agricultural industry amidst rising retail prices.
Government Curbs Agricultural Exports to Control Prices
Faced with escalating retail prices of key agricultural products such as rice, wheat, sugar, and onion, the government implemented measures to curb the upward trend. In a significant move in July 2023, exports of all non-basmati white rice were prohibited to address concerns related to rising prices. Additionally, a 20 percent duty on parboiled rice exports was introduced, initially until October 2023. Recognizing the ongoing need for stabilization, this duty was extended to March 2024. These interventions were designed to strike a balance between ensuring affordability for consumers and supporting the agricultural industry.
The discussions with Finance Minister Nirmala Sitharaman highlighted the complexities of agricultural policy and the need for a balanced approach that supports both farmers and consumers. As the Union Budget approaches, the farming community remains hopeful for positive changes that will enhance India’s position in the global agricultural market.